The Oil Spill Incident

Question 1
Since the oil spill incident in the Gulf of Mexico, BP has incurred a number of claims and charges totaling to an approximated $45 billion. Some of the charges are due to the fines imposed by the U.S government on what is termed as a compulsory contribution to the Deepwater Horizon Oil Spill Trust Fund. However, there are two other hidden costs that the company is likely to incur. One of them is the requirement of the United States Clean water Act that states that a company that is found to have been negligent prior to the spill is required to pay up to $4000 for every barrel of oil spilled. Another possible cost is the outcome of the litigation judgments based on the Oil Pollution Act that may end up in millions of dollars. A report presented by the Commission to the President indicated that BP knew of the possible danger of the rig well years before the accident. This implies that...